New Czech central banker points out to wage growth
Czech wage growth is going to leap next year, thus pushing up prices and enabling the currency to be unpegged from the common currency. That’s what a newly assigned bank board member told in his recent interview.
Vojtech Benda told that he didn’t see any reasons to doubt as for the board's intention to get back to the standard policy around mid-2017, though the Czech Republic was still importing deflationary pressures, while watching European Central Bank policy.
The wage growth is expected to kick in in the middle of the next year. However, developments in the euro zone should be considered too. Meanwhile, the ECB’s policy setting can hardly make it easier for the country.
The country’s major bank has employed a weakened exchange rate since November 2013 in order to lift prices, thus keeping the national currency crown on the weak side of about 27 per euro, by purchasing up to 20.2 billion euros in the market just to keep monetary conditions loose.